Over the past month, the price of bitcoin has shown an increase of about 40%, which is the best result in January since 2013. Coins of such projects as Solana (SOL), Decentraland (MANA) or Axie Infinity (AXS) doubled their value in a month.
The recovery from last year’s crypto market crash has been attributed to a global resurgence of interest in risky assets amid expectations that central banks will slow down interest rate hikes and possibly cut borrowing costs later this year as high inflation subsides.
According to analysts at Glassnode, at the end of January, the crypto market experienced the strongest monthly price increase since October 2021, which was facilitated by both record demand in the spot markets and the massive closing of short positions (“short squeezes”) of traders.
The current rally has returned a significant part of the market to profit, the researchers conclude, referring to data in the blockchain and their own indicators. The massive outflow of funds from crypto exchanges that followed the collapse of FTX has declined to a neutral level and is now balanced by a “motivated inflow” of traders’ assets into trading platforms wallets.
“The market will be very interesting”
Exmo.me CEO Vladimir Cherpichnikov
This January has been the best January for Bitcoin since 2013. At the local top ($23,943), bitcoin has risen by more than 45% since the beginning of the month. This is a phenomenal result. It seems that the thaw is coming to the crypto market after a long winter. Due to the tightening of monetary policy and the crisis of the crypto sector are weakening. The cascade of bankruptcies of crypto companies has stopped, throwing weak and unreliable participants out of the market.
The number of BTC addresses in positive territory reached a maximum in 9 months, so the best idea was to just hold assets and get the volume correctly, observing risk management and not succumbing to general panic.
In terms of ROI, Solana (SOL) was one of the best, but the project has many problems, and this movement was more likely a pullback, as the asset fell heavily due to fundamental factors. Also, the “old guard” in the face of Litecoin (LTC) showed itself perfectly. To the surprise of many, the coin has shown its resilience and excellent growth in recent times. Cardano (ADA) showed itself flawlessly, the asset was clearly oversold. Polkadot (DOT) can also be added to the piggy bank, the project is developing and the price has begun to recover.
In general, all top altcoins showed growth of 40%. Well-known and proven projects were taken into account. It is clear that there were coins that showed 1000% growth, however, we will not judge the quality of such assets and the risk ratio.
It is difficult to say whether the market growth will continue in February, as there are fundamental factors that can turn everything upside down. It is worth waiting for the decision on the interest rate of the Fed and the publication of the inflation rate in the US. The first week of February promises to be very volatile.
Technically, assets need a slight correction or sideways movement, this is necessary for a “healthy” growth. One thing is for sure – the market will be very interesting and will provide an opportunity to earn money for many market participants with any style of trading.
“Succeeded in exceeding expectations”
ENCRY Foundation co-founder Roman Nekrasov
The crypto market showed its best side in January. Many predicted moderate growth, but the market managed to exceed expectations. The bitcoin exchange rate has exceeded $23,000 and is still at this level. This suggests that in the coming week, against the backdrop of the decision of the US Federal Reserve Board of Governors to raise the key rate, Bitcoin can test $25,000. However, it can also drop to $20,000 with the same probability.
Among the rather unexpected, but very inspiring growth leaders are virtual world tokens like Decentraland, The Sandbox. Over the past six months, the excitement around the metaverses has noticeably subsided, and the current growth turned out to be better than investors expected.
In addition, it is worth noting the growth of meme-coins, but there were expectations – they were associated with the coming to power on Twitter (the social network is blocked in Russia) of Elon Musk, and he announced his readiness to introduce crypto payments within the social network.
The crypto market has already added a lot in January, so I do not expect the same pace to continue in February. Rather, I expect strong volatility ahead of and immediately after the release of inflation data (CPI, Feb. 14).”
“Many are waiting for strengthening”
Financial Analyst BitRiver Vladislav Antonov
Since the beginning of the year, the capitalization of the crypto market has increased from $797 billion to $1.041 billion. Bitcoin has risen in price against the US dollar by 38.50%, to $22,925 – the best indicator in terms of profitability since 2014.
Decrease in the dollar index and reduction of the step of the US FRS rate hike from 75 b.p. up to 50 bp provided strong support to the cryptocurrency market. On February 1, the rate is expected to increase by 25 bp to 4.75% per annum.
In anticipation of the halving (halving the block reward in the bitcoin blockchain to 3,125 BTC), which is scheduled for 2024, many expect bitcoin to strengthen. The activity of buyers is constrained by the tightening of the monetary policy of the US Federal Reserve and the weakness of the stock market. Investors fear a global recession that the United States could cause.
If we exclude negative factors, then for the first half of the year, the target zone for buyers is between the levels of $33,000–35,000.